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Exam 21: Auto Insurance Continued

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Question 1

Multiple Choice

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Under which type of automobile insurance arrangement are all automobile insurers in a state assigned their proportionate share of high-risk drivers based on the total volume of automobile business written in the state?

A) automobile insurance plan
B) unsatisfied judgment fund
C) reinsurance facility
D) specialty automobile plan

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Question 2

Multiple Choice

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The residual market for auto insurance is designed to provide insurance to

A) superior risks who qualify for substantial discounts.
B) owners of vintage/antique autos where the replacement cost far exceeds the actual cash value.
C) drivers who are unable to obtain coverage in the standard market.
D) businesses that need to insure a fleet of vehicles under a single policy.

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Question 3

Multiple Choice

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No-fault benefits are provided by adding an endorsement to the auto insurance policy.What is this endorsement typically called?

A few states have dual automobile insurance systems.A motorist can pay a higher premium and retain the right to sue under the tort system,or pay a lower premium and be covered under the state's no-fault law.This dual system is called a

A few states have enacted laws to make minimum amounts of liability insurance available at reduced rates to individuals who cannot afford regular insurance or who have limited financial assets to protect.The coverage made available through such a plan is called

Which of the following statements about uninsured motorists coverage is true?

One benefit payable under a typical no-fault plan is "essential services expenses." Which of the following would be covered under this benefit?

Which of the following statements is (are) true with respect to the use of credit-based insurance scores as an auto insurance rating factor? I.Insurers claim that drivers who have poor insurance scores are expected to have relatively more accidents. II.The use of insurance scores has been banned as a rating factor in all states as it unfairly discriminates against certain groups of individuals.

A number of benefits are payable under no-fault plans.Under one provision,benefits are paid for tasks normally performed by the insured,including such things as lawn care,housework,and home repairs.These tasks are called

The multi-car discount is based on the assumption that

Which of the following statements is true with respect to a pure no-fault auto insurance plan?

Some states have enacted laws which prohibit uninsured drivers from suing a negligent driver for noneconomic damages,such as pain and suffering.These laws are called

A credit-based score that insurers claim is highly predictive of future claims costs is an individual's

Scott had trouble obtaining auto insurance.After three companies refused to insure him,he called the state insurance department.A representative suggested he obtain coverage through Last Chance Insurance Company because "that's all they insure-high-risk drivers." Scott contacted Last Chance.He was not refused coverage;however,the premium Scott was required to pay was three times greater than the average premium in the market.Last Chance Insurance Company is a(n)

"No pay,no play" laws have which of the following characteristics?

New Jersey's dollar-a-day auto insurance coverage is limited to

Sharon lives in a state that has a no-fault automobile insurance law.Under the law,an injured person has the right to sue the negligent driver only if the bodily injury claim exceeds a dollar or verbal threshold.The no-fault law in Sharon's state is a(n)

Alan has been involved in three accidents and has been ticketed for a number of driving violations.He tried to purchase auto insurance,but three insurers refused to sell him coverage.The generic name for state plans designed to insure drivers like Alan is the

The term used to describe plans in which automobile insurers participate to make insurance available to drivers unable to obtain coverage in the standard market is the

Which of the following statements about the characteristics of current no-fault laws is true?